Wridgways accepts takeover offer

Removal and logistics company
Wridgways
Australia has agreed to a $93.1 million takeover offer from Hong Kong rival Santa Fe Holdings.

The acquisition, which offers Wridgways shareholders $2.80 cash per share, will be implemented via a scheme of arrangement, the company said in a statement to the Australian Securities Exchange.

“The proposed acquisition is a positive outcome for Wridgways’ shareholders and enables them to realise cash for their Wridgways’ shares at a premium to recent trading levels," said chairman
Bryan Weir
.

“The transaction will enable Wridgways to more effectively compete in its global market as part of a leading international business."

The premium being offered by Santa Fe, which has a “market-leading position" in corporate relocation in Asia according to the Australian company, may not be enough for Wridgways shareholders.

The shares, which closed at $2.72 on Thursday and were suspended Friday morning, closed at $2.92 yesterday, their highest level since January.

The combined value of the $2.80 offer and a previously announced final dividend of 11¢ represents a 14 per cent premium to the stock’s average price over the three months to September 16, Wridgways said in its letter to shareholders. The $2.91 is equal to a deal multiple of 9.4 times forecast 2011 earnings before interest, tax, depreciation and amortisation.

“The fact that the board has recommended the deal means it doesn’t look like anyone else is likely to come in over the top," said a broker in Sydney. “The only thing that is glaringly obvious for why the shares are trading above the offer is the final dividend to come."

Related Quotes

Company Profile

Santa Fe has no intention to “make any major changes to the business" in Australia and intends to continue employing all staff in the country, according to the statement.

The announced offer of $2.80 per share could be lowered by the payment of any discretionary special dividend by Wridgways prior to the completion of the acquisition, the company said. It is considering paying a fully-franked special dividend of between 40¢ and 42¢ per share, it said.